Connect Humanity, Appalachian Community Capital partner to raise $25M to close region’s broadband gap

Connect Humanity and Appalachian Community Capital (ACC) have jointly raised $25 million through IDEA (Investing in Digital Equity in Appalachia) to bring broadband to Appalachia, one of the nation’s least connected regions.

Just how bad is the connectivity in rural Appalachia? Consider the fact that one in four families lacks broadband access. Meanwhile, only 25 of 423 Appalachian counties were at or above the national average for connectivity; these were all in metropolitan areas. 

The collaboration between ACC, a Community Development Financial Institution (CDFI), and Connect Humanity, a nonprofit impact fund dedicated to digital equity, will create opportunities for local capital to invest in broadband infrastructure, including support for a community of local CDFIs, banks, impact investors, and foundations dedicated to achieving digital equity in underserved communities across 13 Appalachian states.

The campaign builds upon the Federal government's $42 billion commitment to make high-speed broadband access available to all Americans by 2030. However, Connect Humanity said more than this federal funding is needed to connect every American, and more excellent private investment would be crucial to achieving full connectivity. The IDEA Fund will support communities to raise the capital match required to apply for government broadband funds and invest in communities that do not secure government grants.

Empowering communities

A vital part of the program is to help communities enable broadband services for residents and businesses. IDEA leverages Connect Humanity's Appalachian Digital Accelerator, a program in partnership with the Appalachian Regional Commission, to empower 50 of the least connected communities in Appalachia. These communities will develop comprehensive plans to build broadband networks, enabling families and businesses to thrive in the digital economy. The plans communities create through the Accelerator will also help evaluate and de-risk subsequent investments.

Brian Vo, Chief Investment Officer of Connect Humanity, cited how private investment and philanthropy are essential to get broadband into rural areas. "The lack of high-speed access in marginalized rural communities hurts all aspects of life, from business to education, health, and job creation,” he said. “The IDEA Fund can turn plans into reality and demonstrate how new models of community-centered networks can connect Appalachia."

Donna Gambrell, President and CEO of ACC, noted that the “partnership can unlock millions, if not billions, of dollars to connect the unconnected and transform the quality of life for millions.”

Closing the capital gap

The first phase of the ACC and Connect Humanity partnership will focus on raising and deploying the $25 million IDEA Fund to finance new broadband networks in unconnected and underserved areas in Appalachia. Investors can participate directly in the IDEA Fund or as capital partners on individual projects.

While community-focused internet service providers (ISPs) like Chattanooga’s EPB and Longmont Colorado’s Nextlight are cited by PCMag’s “Fastest ISPs in America” as examples of some of the best providers with low-cost, high-speed services, they often lack access to sufficient capital. IDEA will fill this gap by providing capital in sizes and on terms that set networks up for success.

In the second phase of the partnership, ACC and Connect Humanity will collaborate on a technical assistance program to support Appalachian CDFIs in making direct investments in digital equity and emerging community-focused ISPs. The long-term goal is to integrate community broadband investments as a critical part of CDFIs' portfolios.

The initiative seeks to demonstrate that community broadband is a viable investment and aims to ignite a wave of digital equity investors in the region.